Pinterest Inc. is devoting more time to deciding whether to grant advertising customers recurring extensions for payments.
Photo: justin lane/ShutterstockThe chief financial officer of Pinterest Inc. is working to keep revenue flowing without alienating cash-strapped advertisers that use its online image-sharing platform.
Pinterest relies primarily on retailers and packaged-goods companies for advertising revenue, and in recent weeks it has received an increasing number of requests for payment extensions from advertisers struggling with the fallout from coronavirus pandemic-related lockdowns, CFO Todd Morgenfeld said.
Several advertisers have asked to discuss payment terms related to invoices. So far, Pinterest hasn’t granted recurring extensions, but executives have discussed specific invoices with some advertisers facing extreme circumstances, Mr. Morgenfeld said.
San Francisco-based Pinterest last month reported a net loss of $141 million for the most recent quarter ended March 31, slightly larger than what analysts had expected. Its loss widened from a $41 million net loss for the same quarter last year.
Global average revenue per user was 77 cents for the quarter ended March 31, up 7% from a year earlier, Pinterest reported. The company also said it had 367 million global monthly active users, a 26% increase from the same period last year.
Pinterest, like other businesses seeking payments amid the pandemic, has devoted more time to deciding whether to grant advertising customers recurring extensions for payments or risk jeopardizing long-term relationships, Mr. Morgenfeld said.
“On both sides of that equation, there are opportunities and risks,” he said.
Mr. Morgenfeld said he has consulted with other finance and sales executives at the company in deciding whether to grant advertisers a break on payment deadlines. “We’ve had a lot of dialogue around things like payment extensions that I’ve tried to turn from tactical conversations into relationship-building conversations,” he said.
Pinterest’s days sales outstanding—which measures the average number of days between a sale and a payment—rose to 88.68 in March from 60.09 in December, indicating advertisers were taking longer to pay even before the pandemic began, according to data from CreditRiskMonitor, a provider of commercial credit reports.
In addition to his duties as Pinterest’s CFO, Mr. Morgenfeld began overseeing sales and marketing efforts in April after Françoise Brougher stepped down as chief operating officer. The company has declined to comment on Ms. Brougher’s exit. Mr. Morgenfeld in 2016 became Pinterest’s first CFO, joining from Twitter Inc.
Pinterest also is pushing to retain existing advertisers with plans to share more analytics on how consumers use its platform to demonstrate how ad spend on it translates into sales.
“Advertisers are reluctant to spend a lot of money on Pinterest until they have more confidence that the ads work,” said Colin Sebastian, an analyst at Robert W. Baird & Co., a Milwaukee-based investment bank.
Retaining existing advertising customers is usually less costly than trying to lure new customers to a platform, said Ygal Arounian, an analyst at Wedbush Securities Inc., a Los Angeles-based financial-services firm. “Even if their current advertisers are forced to pull back on their spend in the Covid environment, maintaining relationships with them is really important,” he said.
Write to Mark Maurer at mark.maurer@wsj.com
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